(Reuters) – Elevance Health cut its full-year profit forecast on Thursday, as it expects to pay out more in claims due to robust demand for medical care from members in its government-backed plans, sending its shares down 6% in premarket trading.
The health insurer projects an adjusted profit of $33 per share for 2024, compared with its previous expectation of at least $37.20 per share.
Analysts on average were expecting a profit of $37.26 per share, according to data compiled by LSEG.
Elevance and some other insurers have indicated that the costs associated with Medicaid plans are expected to be high this year, as an end of a pandemic-era policy has left insurers with more sick patients.
Government-backed Medicaid insurance covers medical care costs for people with limited income.
The company’s medical loss ratio — the percentage of premiums spent on medical care — was 89.5% in the third quarter, compared with the 86.8% reported a year earlier and the analysts’ estimate of 87.15%.
The insurer’s adjusted profit of $8.37 per share for the third quarter missed analysts’ average estimate of $9.66 per share.
(Reporting by Bhanvi Satija and Sneha S K in Bengaluru; Editing by Shilpi Majumdar)
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